COMMITMENTS AND CONTINGENCIES

12 Months Ended

Dec. 31, 2012

COMMITMENTS AND CONTINGENCIES [Abstract]

COMMITMENTS AND CONTINGENCIES

Note 9 – Commitments and Contingencies

Operating Leases

Operating leases are primarily for office space, data centers, equipment and automobiles.

On October 24, 2012, the Company entered into a 66-month lease for 5,806 square feet of office space in downtown Ft. Lauderdale, Florida. The Company relocated its corporate headquarters from Sunrise, Florida to the new location upon the termination of the lease in February 2013.

 

At December 31, 2012, the future minimum lease payments under operating leases are summarized as follows:

Year Ending December 31	Amount
2013	$	433,000
2014		432,000
2015		426,000
2016		109,000
2017		112,000
Thereafter		77,000
Total	$	1,589,000

Rent expense approximated $529,000 and $572,000 for the years ended December 31, 2012 and 2011, respectively.

Employment Agreements

The Company has an employment agreement with Mr. Oakes, our Chief Executive Officer and President, for a two-year term effective January 1, 2012 through December 31, 2013.  The agreement provides for a base salary of $22,917 per month, annual incentive bonuses based on the Company's performance in achieving prescribed revenue and earnings before interest and taxes ("EBIT") targets, and discretionary bonuses.  The agreement further provided for a January 1, 2012 grant of options to purchase an aggregate of 360,000 shares of common stock of the Company, at an exercise price of $1.15 per share, 90,000 of such options to vest on the twelve-month anniversary date of grant and the remaining options to vest in equal monthly installments beginning on the thirteen-month anniversary of the date of grant and concluding on the four-year anniversary of the date of grant.  In addition, the Company agreed to reimburse Mr. Oakes for up to $25,000 of expenses incurred in connection with his relocation to the Company's headquarters in Fort Lauderdale, Florida.  The agreement also provides for reimbursement of certain out-of-pocket expenses and certain severance benefits in the event of termination prior to the expiration date.

On April 5, 2012, the Compensation Committee of the Board of Directors agreed that the Company would continue to make lease payments on the corporate apartment located in Fort Lauderdale, Florida and utilized by Mr. Oakes, through the date of termination of such lease, which was extended to May 2013, in lieu of the Company's reimbursement of up to $25,000 of relocation expenses as originally provided in the Agreement.